Advanced Micro Devices stock was climbing Monday after another analyst became optimistic about the chip maker’s ability to gain market share.
Baird analyst Tristan Gerra upgraded AMD shares (ticker: AMD) to Outperform from Neutral and raised his 12-month price target on the stock to $100 from $65. Gerra cited confidence in the company’s new line of central processing units (CPUs), named “Genoa,” and the ability of those CPUs to help AMD gain market share in a competitive space.
“Genoa’s very significant performance step up should translate into an acceleration in market share gains for AMD in 2023 in our view, along with significantly higher pricing and a higher gross margin profile,” Gerra wrote in a research note. Adding that the move should reinforce “AMD’s EPYC performance leadership for years to come before Intel (INTC) could catch up, even assuming on-time execution for Intel 3.”
Gerra is not the only one to recognize AMD is gaining market share as Intel struggles amid tough competition. J.P. Morgan analyst Harlan Sur wrote in a research note last week that “after several years of server CPU share loss to AMD and continued product execution missteps, we believe it will be several years before Intel is able to reverse the tide to reclaim technology leadership in hopes of regaining market share.”
While these analysts are confident in AMD’s ability to gain market share, there remain issues affecting the industry to which the company is not immune. Weak demand for personal computers (PCs) has been a consistent overhang for computer and chip companies including AMD, Intel and Microsoft (MSFT). Despite this, UBS analyst Timothy Arcuri upgraded shares of AMD to Buy from Neutral and raised his price target to $95 from $75.
“The PC segment has been early in digesting inventory and been dragging down growth, but overall CPU shipments are annualizing to about [230 million] units in [the fourth quarter]—far below even the most bearish market forecasts for PCs in 2023 and suggesting some replenishment moving through 2023,” Arcuri wrote in a research note.
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